• / Free eNewsletters & Magazine
  • / My Account

Related Content

  1. Videos
  2. Articles
  1. How to Survey the Changing Annuity Landscape

    Market trends have altered the benefits of several annuity products, and Morningstar's Kevin Loffredi examines what retirees should know before investing in these vehicles.

  2. How to Build Your Income Stream

    As yields remain low, today's retirees have to really think out of the box when it comes to building an income stream; noted advisor Harold Evensky and Vanguard's John Ameriks explore practical strategies to obtain income without overstretching for yield.

  3. Annuities : More Insurance Than Investment

    Investors should think of annuities like other risk-management tools, weighing how much they value the protection of lifelong income, says Morningstar Investment Management's David Blanchett.

  4. 3 Ways to Make Your Money Last in Retirement

    Christine Benz highlights the pros and cons of annuities and other longevity-hedging strategies.

Wise to Be Healthy

To handle the strains, you need to be physically prepared.

Carl Richards, 11/30/2015

During my 20 years in the business, I’ve had to deal with some scary markets like the dip in 1998. Y2K didn’t get me down, and I had no problem helping clients stay the course through the tech bubble. But then came the financial crisis of 2008–09.

It was brutal for most of us. We needed to stay strong and confident for clients, all while dealing with our own financial concerns. Personally, I was scared. My income had gone down, I was worried about my investments, and the uncertainty was getting to me.

This uncertainty came to a head during a client meeting. These longtime clients were nervous. The only correct advice I could give them was to stay the course. They had a well-designed portfolio. It made zero sense to sell.

Although my advice didn’t totally satisfy them, my confidence helped them feel better. But as I walked out of the meeting, and with my hand still on the conference room door, I remember thinking, “Man, I hope I’m right.”

A few days later, a good friend reached out to me. He was close to selling his business. He asked me, “How are we going to invest the money?” At that moment, I was so full of uncertainty that the only answer I could give him was, “I don’t know.”

It turns out I wasn’t alone. In 2008, a survey of financial planners by the FPA Research Group revealed that 60% of financial planners “were rethinking how they were managing investment risk and [the] asset allocation for clients.” Now we know, given the weighty evidence of history, that the advice to stay the course worked. But what many of us experienced during 2008– 09 tells us something important.

The primary job of any real financial planner is to help clients make incredibly important decisions in the face of irreducible uncertainty. By definition, it’s the uncertainty that we can’t get rid of even after we’ve thought of everything else.

However, with a little planning, we can be better prepared to handle it, both professionally and personally. For example, multiple studies show that when we take care of our physical selves, our mental selves benefit. I want to share with you three little things that can make a huge difference. Just as a disclaimer, I fully expect that you’ll roll your eyes at all three, but they’re so important and powerful that author Tom Rath wrote a best-selling book around what I’m about to share.

> 1 Get enough sleep.
If you’ve ever said the words, “I’ll sleep when I’m dead,” don’t be surprised if that happens sooner rather than later. The evidence is clear that too little sleep hurts us physically and makes us dumber than normal.

> 2 Eat healthy food.
If your idea of breakfast is coffee and a doughnut, try replacing some of the carbs and sugar with a little healthy fat and protein. You’ll be surprised how fast you feel better when you’re eating better.

> 3 Move every day.
The human body was built to move. Our jobs are built for us to sit. Of course, a short high-intensity workout will make a difference. But let’s start easy. Set an alarm once an hour to move for 10 minutes. You’ll be blown away at the difference it makes.

By now, you’re probably wondering how this ended up in Morningstar. But the fact remains that to best serve our clients, we need to take care of ourselves, too. We want you around for a long time, and don’t tell me that even small things done regularly over time can’t make a big difference. (Compound interest, anyone?)

The author is a freelance contributor to MorningstarAdvisor.com. The views expressed in this article may or may not reflect the views of Morningstar.

blog comments powered by Disqus
Upcoming Events

©2014 Morningstar Advisor. All right reserved.